- For the first time in the history of the European Union, the leaders of the member states of the European Union approved a budget and a financial package of €1.8 trillion.
- After four days of negotiations, the member states of the union agreed on the allocation of €390 billion in grants
- Hungary and Poland won major victories regarding EU values.
In the early hours of Tuesday morning, European Council President Charles Michel announced an historic agreement in a Twitter post. The talks between the leaders of the EU member states lasted a total of more than four days, longer than any other great conference of this union.
It is very rare for the talks between the leaders of the EU member states to last more than four days. The last time such a long conference was held was in Nice in 2000. The issue was over hundreds of billions of euros.
Among other things, the EU bailout package had to be agreed upon to accelerate economic growth, and deal with the devastating consequences of the coronavirus for the EU member states.
For the first time in the history of the European Union, the leaders of the member states of the European Union approved a budget and a financial package of €1.8 trillion.
€750 Billion in Coronavirus Aid
One of the main points of contention between the leaders of the EU member states was the allocation of €750 billion to help the economies of the countries affected by the Coronavirus crisis.
France, Germany, Spain, and Italy have demanded that €500 billion of this amount be given to these countries as grants. However, some other countries, including Austria and the Netherlands, opposed the allocation of such funds.
After four days of negotiations, the member states of the union agreed on the allocation of €390 billion in grants. In addition, another €360 million will be provided to applicant countries in the form of loans in connection with the Coronavirus’ grant.
Approval of the Budget of the Union
On the other hand, the EU member states agreed on a seven-year EU budget. Budgets amounting to €1.04 trillion. EU member states are set to take steps to create an economy that is in line with environmental needs, as well as a digital economy.
The approval of a total of €1.8 trillion in financial packages at the summit of the leaders of the member states of the Union is unprecedented in terms of volume in the history of the union.
The approval of this macro-financial package is possible only through the collective agreement of the Union members on collective borrowing. Borrowing countries have time until 2058 to repay their loans.
One Agreement and Two Approaches
Austria and the Netherlands were among the countries that demanded that the payment of Coronavirus’ financial aid be conditional on member states adhering to EU political commitments and values. This issue was opposed by Eastern European countries, including Hungary and Poland.
It goes without saying that in the post-agreement period if a country does not adhere to its obligations, including the political and legal values set by the European Union, the repayment of these grants and loans can be reduced accordingly.
The issue is the passage of some laws in Poland and Hungary, which other member states believe are inconsistent with the rule of law and political and legal values.
Polish media have denied such a stipulation in the agreement on Coronavirus’ financial aid following the announcement of the EU agreement. Hungarian media also called the EU agreement a great victory for Viktor Orban.